legalising among other things the use of VoIP

Thefinancial crisis is likely to put more pressure on market competition pricing inthe South Pacific Islands, and this will actually favour new entrants such asDigicel over the incumbents, and allow them to accelerate their gain in marketshare, through more competitive service offerings Key Topics Covered: 1. Related reportsFor more information visit http:// Research and MarketsLaura WoodSenior Fax from USA: 646-607-1907Fax from rest of the world: 353-1-481-1716 Copyright Business Wire 2009. This report provides a comprehensive overview of the trends and developments inthe telecommunications markets of three African countries: The continent'sleading market, South Africa, as well as its two neighbours, Lesotho andSwaziland. Subjects covered include: Key statistics; Market and industry overviews; Regulatory environment and structural reform; Major players (fixed, mobile and broadband); Infrastructure development; Mobile voice and data markets; Average Revenue per User (ARPU) trends; Internet, including broadband development; Convergence (voice/data, fixed/wireless/mobile)South Africa is the economic powerhouse and leading telecommunications market ofthe African continent. At around 100 market penetration, the country's mobileoperators are forced to find innovative ways of distinguishing themselves fromthe competition in order to gain and retain customers, save costs and developnew revenue streams. Another is the rollout of fibre optic national backbone networksin competition with other infrastructure providers.

The arrival of newinternational submarine fibre optic cables to the region in 2009 will bring downthe cost of international bandwidth dramatically. The small kingdoms of Lesothoand Swaziland, although landlocked and largely dependent on their powerfulneighbour, are expected to benefit from these developments as well. South Africa boasts the continent's most advanced telecom market in terms oftechnology deployed and services provided. Following years of delays with itslicensing, the second national operator Neotel has finally launched services incompetition to Telkom SA, using wireless technologies such as CDMA and WiMAX toprovide alternatives to the incumbent's copper access network. Billions ofdollars are being invested in IP-based next-generation networks capable ofdelivering converged services more efficiently. In addition, the government hascreated InfraCo, a national infrastructure company to provide cheap backbonenetwork capacity to service providers, and the mobile operators are rolling outtheir own national fibre optic backbone networks. Despite this significantlyincreased competition on the infrastructure level, many municipalities areimplementing their own fibre and wireless broadband networks, including all ofthe major metro areas.

SA's Internet and broadband market is finally taking off after years ofstagnation due to an expensive operating environment created by Telkom'sdominance in the fixed-line and bandwidth market. The arrival of newinternational submarine fibre optic cables to the country's shores in 2009 willbring down the cost of international bandwidth dramatically. With mobile marketpenetration at around 100, South Africa's mobile network operators are seekingnew revenue streams from entering the broadband sector. Their 3G/HSPA mobiledata services now rival available ADSL offerings in terms of both speed andprice, and consequently subscriber numbers.

With its fixed-line network reachingonly 10 of the population, Telkom has reacted by launching its own 3G networkand the country's first commercial WiMAX wireless broadband service, but variouscompetitors are hard on its heels rolling out the same technology. This, in combination with sweeping liberalisation measures initiated four yearsearlier, legalising - among other things - the use of VoIP, is beginning tochange South Africa's telecoms landscape fundamentally. Under the new regulatoryregime, alternative service providers are pushing into the market with convergedservices VoIP revenue was expected to triple in 2008 ISPs are turning intophone companies, and vice versa. Both are moving into delivering media,entertainment and lifestyle content over their networks, while in turn thetraditional electronic media carriers are discovering the potential of theirinfrastructure for telecommunications service delivery.